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Worldwide Exchange

News/Business. Ross Westgate, Kelly Evans. Ross Westgate and Kelly Evans consider the business stories that have global significance. New.

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U.s. 25, Us 17, China 17, Dell 16, Europe 15, Spain 14, Espn 10, Rbc 8, S&p 8, Italy 8, Hsbc 7, Umc 7, Ross 7, Volvo 6, Singapore 6, Bob Iger 6, Japan 5, Mazda 5, Reuters 5, Hoveround 5,
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  CNBC    Worldwide Exchange    News/Business. Ross Westgate, Kelly Evans. Ross Westgate and  
   Kelly Evans consider the business stories that have global...  

    February 6, 2013
    4:00 - 6:00am EST  

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hello, you're watching today's edition of "worldwide exchange." i'm ross westgate. >> i'm kelly evans. these are your headlines -- >> the mighty surge for the nikkei as they swoon on news that the governor will make an early exit, opening the door for more easing sooner. a rise in global steel
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demand thanks to shipments in china after a dismal year for the industry. disney could be the happiest place on earth today. the media giant reports better than expected earnings, sees even brighter days ahead. new imminent privatization for ubs. the business secretary plays down talk of a government plan to sell shares in the state-owned banks. this as rbc confirms it's liable to face libor penalties. all right. let's bring you up to speed at the top of the program. we start with global equities and european equities in particular, weighted to the upside. 8-1. advancers outpaced decliners at the moment. footse 100, gauges today, this is where we stand. up .5%, xetera dax up a quarter. the ibex up .4, trying to receiver from the losses on monday -- recover from the
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losses on monday. the cac cac up .25. shares jumping after a strong earnings report. the danish wind turbine maker announcing better than expected rise in fourth quarter profit and revenue. stock up 7%. they expect a pickup and more demand this year. this after the net loss widened to $4 billion in the fourth quarter compared to a $1 billion last year. it's the forward looking statement that we like. the swiss down 2%. they had record sales in 2013 helped by strong commodity prices. i sentenced that was going to be expected ahead of the report. and volvo up nearly 4% in stockholm today. they've been noting weakness in europe. the c.o. said they're seeing a more positive trend for orders in the first quarter. as far as bond markets are concerned, gilt yesterday, 2.12%. the sterling, though, still weak.
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we'll get to that in a second. the ten-year italian yields, 4.43%, lower than we were after the rise on monday. spanish yields at 5.33. remember, we got to 5.4. we're cautious ahead of the auction tomorrow, 4.5 billion. and a german bund auction today, you see we're currently 1.649%. demand for that supposed to be fairly solid. as far as the currency markets, remember yesterday early morning, 1.3459 the euro/dollar cross rate. at the moment, 1.3537. dollar/yen got to a 33-month low yen against the dollar. back at the moment to 93.68. aussie/dollar, down to 11-week lows at 1.0314. weak local sales prompting thoughts there may be more cuts to come from the australian central bank. and sterling/dollar, $1.5634 at the moment. down at a half, 5.5-month low
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against the dollar. and sterling seems to have become more of a risk off of currency than the dollar. when there's a little bit of risk it continues to weaken against the greenbacks. that's where we stand in europe. we'll bring you up to speed with what happened in asia. we have more from singapore. most asian borses end in the green. the japanese market took center stage in asia, ending higher by a stunning 3.8% to a 4.5-year high. the prospect of a new boj governor and aggressive monetary easing has weakened the yen to near the 94 handle against the greenback and sent exporter stocks higher. avian shares soared at 22% after posting a 29% jump in net profit for the last three quarters. the world's largest carmaker, toyota, rallied 6% after raising annual profit guidance on the weaker yen and
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stronger u.s. sales. elsewhere in china, the shanghai managed to end in the green for the eighth straight session. property developers saw profit-taking on fears of new curbs, but brokerages staged a strong rebound after losing over the past two days. the hang seng rebounded from its one-month low, ending higher by about .5%. many blue-chip name gained ground. but gaming stocks tumbled after the "times" in the u.k. reported beijing is set to crack down on junket operators bringing in high rollers to the mainland. the move continues the fight against corruption and money laundering. elsewhere, south korea's kospi bucked the upward trend, ending lower by about .1%. australia's asx 200 climbed to a 21-month high, ending higher .8% helped by gains in miners in banks. india, action trading flat. back to you. >> all right. thank you very much for that. that's where we stand. >> of course in the case of the
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nikkei, jumped -- an extraordinary move. you have to wonder, i haven't heard people ruling out hitting levels of 2,000 again. if you consider -- 20,000 again. if you consider we came from 40,000, not that much of a stretch. we're in the 11,000 range now. >> they had called for the nikkei to rise and hit the peak in second quarter but then fall back, the second half of the year. they think the eurozone crisis will reignite. therefore, the yen will strengthen as a safe haven. >> and in the camp saying the real issue with japan is not actually that this is a game changer but that it won't be. >> yeah. >> interesting to see people -- there's split sentiment on this issue. >> you look what the nikkei's done from the fourth quarter forwards -- >> never a straight line. keeps going. >> quick spread on the nikkei, that's all you needed. didn't need anything else. what are you doing here in television? >> i have no idea. no, you see because i didn't do it. that's why i'm sitting here. >> or not because you enjoy it
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so much. >> i enjoy being with you. >> aw. >> that's the thing. >> thanks. the u.s. markets higher, as well. u.s. markets on a take-away rebound after monday's losses. the s&p 500 and the nasdaq managing to record the second best session of the year. the dow transports index closed at an all-time high, up 11% so far. the founder at libra investment services, chris, good morning. nice to see you. >> good morning. >> a little swoon on monday. then we're trying to rebuild things again. look, thing never go in a straight line. are you happy the general upward trend is intact? >> very much so, ross. we've talked about this many times in the past 12 to 18 months that the sense to which people have been very aware of those unknowns, those political risks, big negatives associated with the euro, associated with fiscal issues in the united states, political uncertainty, they were very justifiable
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reasons for investors to be sitting on cash, sitting on the sidelines. i think what people are recognizing at the beginning of 2013 is from a relative perspective, those risks aren't stuff to justify not being involved -- aren't enough to justify not being involved and we've seen the news flow and information -- on monday, i wasn't in the office monday. as an outside obsessiver, i thought what's that about. >> of course you weren't in the office. >> yeah. i think -- >> oh, chris is not at work! >> single-handedly propping the market up. i wasn't around on monday. you found me out. the reality of the focus of concerns -- i was talking to people on the phone monday. people say, oh, it's wobbly. well, really what we've recognized is nothing's going in a straight line, but the enthusiasm with which people are trying to talk it down to buy the dip tells you that it's not going down for people to buy the dip. >> right. >> the best in the world -- on if you talk forecasts, up in the
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first half, down in the second half, you start predicting something which has such a large sent. element to it. you're never going to get that bit of the timing right. and you end up looking exposed to what's often very much a momentum move, definitely what we're seeing in japan now. very much a momentum move. >> people are pointing to moves in nokia, tires, volvo, saying, look, these were bid to open lower, they moved higher already the open. it suggests perhaps that there are no sellers around at these levels. is that still your sense? is there any reason, though, to kind of look at this and be worried about sentiment, valuation? >> you're right to the extent that sentiment has gone on a tear. and looking at stories like volvo, i mean volvo you can take the good news out of the story if you want to. you can look at the destocking. you can look at the prospects for next year. and there is positive sentiment there. people wanting to listen to the positive now, that's the difference. and in somewhere like tokyo it's hard to put on new longs. we look at the long we've been
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recommending, they're doing what they're doing because value's still rising. i think that's where moment people are. if you were invested, you're in no rush to take money off the table. particularly if you just traded this. you're worried if you trade out you won't be able to get back in again. that's the upside. >> where do you see opportunity given the moves that -- that we've seen. a couple of specifics? >> we've been focusing on the profit-taking that happens. it doesn't happen for long periods of time. when you've gone from a buy opportunity that rallies quickly, you take the profits and come back in again. when you look at technology, the rally coming in the states, when you're looking at the industrials, the industrials went too far. but they're quickly coming back into buy territory now. so the scandinavian industrials that got sold off recovering again quickly. >> your profit suggested, wpp, ppr, nordia -- >> these names occurred for us. wpp had a strong run so far this
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year, up 13.14%. saying you have to take money off the table. come back 1.5%. we're saying, look, if you're chasing on the basis of the last phase momentum, you're going to get a better opportunity to buy wpp. we were buying wpp in november. the sent to come our recommendations are put out on a daily basis, it's important to recognize that these are shorter term, takes some profits here. don't just sit there and wait for it to give back 5%, 6%, because you can make money out of that opportunity. what we're saying is you don't go short here. it's a difficult market to go short in. people will buy these things at more reasonable prices. something's gone up 12%, inevitably it's going to be some correction phase. there's a wave of people who dent didn't buy in november -- like ross' failure to buy the nikkei before christmas -- >> exactly. >> there are a lot of people who said with hindsight that was an obvious trade. obvious trades are never good at the time because they don't do
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what we've seen the nikkei do. >> right. >> it would be nice to see an obvious trade, you know, at the time. >> yes, yeah. can someone develop an app for that? maybe chris can help -- >> the trade spotter. >> we'll do what we can. >> not in the past tense. >> right. speaking of some corporate news, mickey mouse has plenty to smile about. disney reported better than expected first-quarter results despite a drop in profit due to higher costs at espn. we have more on the results including big news about a galaxy far, far away. >> reporter: disney earnings beat wall street expectations sending shares trading higher after hours. diluted earnings per share secluding one-time items were 79 cents. that's down a penny from a year ago, but three cents higher than expected. revenue also grew, up 5% over a year ago. ceo bob iger says advertising is growing, and tv fees are also expected to grow this year. the first on cnbc interviewer, i
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asked him what his expectations are for the economy in 2013. >> well, i would say our outlook for europe is dim. not all that enthusiastic. our outlook for asia is for our product is probably better than what maybe many other industries are seeing. we feel good about our positioning there. our outlook for the united states is quite good. i mentioned advertising trends, particularly espn. our booking for the parks, we've had i think five weeks in a row of improvement bookings over a year ago in orlando. that's an interesting pattern. i mentioned cruise shipts 80% booked with 16% more capacity than a year ago. that's a good sign. i would say as we look ahead at the year from a -- a consumer perspective, i'd say more positive than not. >> in a first on cnbc interviewer, disney's ceo, bob iger, made big news about disney's lucasfilm division saying two films are in the
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works. spinoffs about "star wars" characters. these are in addition to the planned trilogy, episodes seven through nine, which the company announced along with its acquisition of lucasfilm. for my entire interviewer with bob iger, go to cnbc.com. back to you. >> all right. that's julia with her thoughts on that. what "star wars" character did you want to see have their own movie? e-mail or tweet us. what character would you like to see? >> let's ask chris, actually, what character would you like to see? apparently everyone's going to have their turn at this point. who should be next? >> if you're going to have the action hero, you have to have the millennium falcon have its own series, the only thing people will be interested in. the millennium falcon in its own series. >> what would yours be, ross? >> with happen solo. >> of course. >> yeah. >> there we go. the fair point. yeah. you need a starship to go off
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and -- to give you your -- what do you call tell in skrit writing, the vehicle to take you places to have stories. a corporate raider starship, that's what the millennium falcon was, right? >> a whole new genre. >> transporting goods and people illegally across the galaxy. dell agreed to go private in a buyout led by private equity firm silver lake. it is the biggest leveraged buyout since the 2008 crisis. shareholders have voiced concern about the price saying the board should have held out for $14 a share. one stakeholder is investigating whether the board is breaching its fiduciary duty. yeah, chris, should they have held out for more? >> i think it's an interesting development to see this emergence of taking companies private as an argument for
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really just being able to develop a longer term change of corporate strategy. and i think if you look at what dell shareholders have been complaining about, it's been the fact that there hasn't been a -- a real evolution of a strategy. and i think the argument that you can make is, i mean, from a valuation perspective, i think this is reasonable. it's not -- not the kind of valuation that a hostile takeover might have suggested. that might have been $3 or $4 higher in the way that we would analyze the numbers. the reality is, dell hasn't got itself to where investors had hoped it was going to be from a strategic point of view. i think michael dell's point is, look, i need to have the freedom do this. taking it private is potentially going to give me the freedom. >> here's the question -- if you've got a leveraged buyout, h.p. would argue that means you're not going to have the money to invest. are they right, or actually if you've got that back, you no longer have to worry about public shareholders, you can afford to invest in the company? >> the nature of your investors becomes different. i mean, there's a strategic
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investor clearly with microsoft. its involvement -- michael dell's involvement, and nothing more important than being the guy who wants to take his own vision forward again. we forget how innovative he appeared to be at the beginning of the evolution of personal computers. he's saying he wants to go to this sort of mid enterprise section of the market. you know, it's not a -- not a unique idea. but he feels that they've got the experience and the capacity to do that. microsoft is clearly identifying matters as a section of the market that it also has an ambition to get into in a different rentiated way. i think the strategic relationship between michael dell and microsoft is core to whether this is going to work or not. for existing shareholders, if you've been sitting in dell for three years, until recently, you were probably the same investor that didn't want to invest in apple and had your moment for the last half of the last year. remember, an awful lot of
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technology people didn't believe that apple was going to get into any of the technology areas that it did. >> michael dell included. >> michael dell included. as a consequence, he knows computers have been mobile, he knows there are tablets and smartphones, he knows there's no reason to compete there because he's never going to be able to make the money on the margins. i think investors who are lamenting the fact that -- the buyout, like, well, you know what, you got an uplift, premium on an investment in a company that will still be around. you know, you put your money into silver lake. put your money into microsoft. if you want to leverage that trade, you've got publicly listed vehicles or access to listing companies that you can get part of that. so i think that will blow over. i think this deal will go ahead. i think it won't be the last of these trades. >> no, that's for sure, especially with the financing conditions in place for it. as investors seek clues on what dell will look like, some analysts predict an end of an era for the company's p.c. empire. no kidding. go to cnbc.com to find out why
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some think dell could become a mini ibm. >> mini ibm. today, coming up, an outlook from disney for the coming quarter. even as they post a 6% fall in q1 profit, we'll have more analysis from, where else, l.a. at 11:30 cet. news from the bank of japan and imminent change in policy sent the yen down to 33-month lows against the greenback and the euro. we'll talk currencies at 11:00 a.m. cet. >> and in zurich, the world's biggest agro chemicals group says it's on track to reap another year of record sales. at 10:30, central european time, we'll head to singapore for a view on the semiconductor industry as two of asia's biggest chipmakers report results. more on dell, does going private mean a reboot for the company? we'll have in-depth analysis at 11:20 central european time.
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and in madrid, signs of corruption over the prime minister show no signs of abating. more details when we come back. o
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welcome back. the embattled italiandhere could reveal details of its derivatives losses at the center of a scandal engulfing the lender. derivatives trades carried out between 2006 and 2009 are likely to have lost the 725 million euro estimate expected last october. s&p cut the rating to bb last week. shares this morning, though, up about 1.6%. they've been so beaten down, they're subject to wide percentage swings, 23 cents. >> and the prime minister's former party treasurer louis bothneth facing allegations of tax evasion linked to a 22 million swiss. it's unleashed a political storm involving rajoy who received 25,000 euros from stash funds. the passion party calling for his resignation. more than 900,000 spaniards have signed an online petition to oust the premier.
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joining us now is country director at change.org which is running that petition. thank you very much, indeed, for joining us. i mean, how many people are signing on a day? >> this petition has become the fastest growing petition ever. more than 3-00,000 people signed -- 3-00,000 people signed in 12th hour. today it has more than 900,000 signatures. >> what's the history of you actually -- your petitionings actually leading to the outcomes that they are petitioning for? >> we have seen a lot of petitions asking for letters of resignations of public people in spain. we can recall the petition with more than 100,000 signatures asking for the resignation of the president of the supreme court in spain.
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after the position he resigned. >> right. there are those obviously, the party secretary general claims the accounts are false. and the pp is protesting its innocence. i've never received or handed out black money is mr. rajoy's claim. don't i have a right to fight these and stick around? >> well, of course they have the right to fight this, but they need to explain better to the spanish citizens that they have a clear conscience in their party. the perception after what we can see on the platform is that people need more explanation about what is happening inside and they want consequences if this happens to be true. >> there's been a lot of talk about how unhappy the spaniards seem to be with politics and politicians generally speaking. so i guess it's one thing to kind of push for rajoy to step down. are you seeing anything else in terms of what spaniards do want?
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>> well, in the last time we have seen a lot of petitions related to the political and economical situation that spain is going through. a lot of petitions related to the cards, asking for resignations, and asking for responsible after all the cases of corruption that we are seeing. we can see that the spanish citizens are not attaching to the status quo. they are really asking for a change. >> what kind of change do you think they'd like to see? it's one -- one comment in the analyst community is that they think that rajoy's government ultimately will stand because there are simply no alternatives. >> i cannot answer to that. i can answer to what i see on the platform. people are really asking for change. for example, one of the biggest petitions that we have seen on changes is about the transparency law that is currently being passed in parliament. this -- this law currently doesn't include political, its foundations or unions. people have signed a petition
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with more than 100,000 signatures asking for the inclusion of political parties, its foundations, and unions because they want more transparency, and they want to end corruption in state. >> francisco, finally, have you experienced political pressure as a result of these petitions? >> no at all. it is an open platform that allows anyone anywhere to start a petition and make the change they want to see. and i think that spanish politician politicians use that to express opinion. >> reminding us that the petition for rajoy to step down has been one of the fastest growing for the group. thank you very much. >> let's get a final thought from you on that. spain has a bond auction coming up. the first since this political storm has brewed, as well. people haven't actually necessarily looked at whether the problem's going to be a failed bond auction, i think,
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but it's weather the politics changes or whether people take money out of the banks in spain. is there's an inflection point, where is it going to come from? >> i think if you saw the price reaction on monday was i complete read across from what was going on in the fixed income markets to equities. this idea that you're taking on risk in spain because things aren't as negative and as disastrous as maybe they were appearing six, 12 months ago, led to a large part of the rally in place. spain, greece, italy. and monday's price action was a reminder of the fact that these political issues haven't gone away. and if you feel that there's political risk to your investment rather than just price and volatility troisk your investment, i think these underlying messages about the political environment in spain, notwithstanding kelly's point about what is the alternative here. the fact that there's political instability means as an investment area it's not sit back and say thank you very much
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and everything's all right again. those issues are still this. the move we've seen in the last, you know, four, five months has been about this extreme risk gap closing. there's very little out there in the spanish market which doesn't have an alignment roughly with where value is now. it's not a market trading at a big discount to its value. the risk moves to almost zero. we know low volatility's out there for a lot of markets. as the risk apps widen again, places like spain and italy will be in the forefront of that profit-taking and price gapping again. that's the risk you face. these are much higher beater areas of your investment portfolio. and if it requires there to be a consistent stable political environment, neither spain nor italy will be delivering that sufficiently for you not to think about readjusting exposure to improving sentiment in germany, in the u.k., in the u.s. and japan. compared to -- i've ridden a nice risk recovery trend in italy and spain, but is there
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growth recovery. if i stay in stocks, do i look at the broader footprint. the retailer is obviously a large cap name in the european markets. it's got a very domestic exposure. when that sells off on negative sentiment, often there's an opportunity to go and buy that kind of stock with that exposure with the exception of that and -- midwest of the spanish market is so correlated to that domestic political environment, utilities, main financials, that it's hard to separate your shorter-term risk from those overlays. it's not a market we chase to, but certainly opportunities to go and buy good stocks at a discount is always there in spain and italy. i think that will be the message for the first quarter. >> thanks for that, chris joining us from libra investment services. still ahead, we'll take a closer look at asia's chipmakers. we have key earnings and the latest analysis from singapore.
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these are the headlines from around the world. a mighty surge for the nikkei in japan. the yen swoons on news that the bank of japan president will
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make an early exit, making the way for slow easing. a pickup in shipments to china after a dismal year for the industry. disney could well be the happiest place on earth today as the media giant reports better than expected earnings and sees brighter days coming up. no imminent privatization for rbc. u.k. business secretary vince cable plays down talk of a government plan to sell shares in the state-owned bank. this as rbc confirms it's likely to face signature libor penalties. european markets weighted to the upside. the dakotas off flat from the acc. the ibex up .4%. trying to claw back from monday's trade. >> take a look at what's happening in the bond space, as well. this is where you've seen yields moving higher over the last several trading sessions. today coming in a bit, 5.36 and 5.55.
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the ten-year bund back to 1.64%. gilts 2.20. >> currency markets, euro/dollar hit 1.3459 yesterday morning. you see the euro/dollar, down on today's session. dollar/yen and euro/yen hit fresh 35-month highs. 93.79. sterling/dollar down at 5.5-month lows at 1.5630. and the dollar/swiss franc firm at .91. and down 11-week lows, as well. the taiwanese chipmaker has missed estimates citing weaker than expected demand for medium chips and strong local currency. the number-two contract chipmaker saw net profit rise 20% on the year to $40 million. meanwhile, shares of china's biggest chipmaker, smic, were up 6% ahead of earnings due after the bell. sorry that that chart doesn't
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reflect it there. for more on the outlook for asia's chipmakers, we're joined by v.p. of consulting at asia pacific at frost and sullivan. thanks for joining us. and it's interesting to look at the divergence between benchmark china and benchmark taiwanese chipmakers. a tale of two different countries, two different markets, what do you think explains the divergence here? >> well, i think you see the divergence even between the two chinese -- the two taiwanese chipmakers, as well. if you look at umc, if you look at dsmc, you can see the difference in terms of how both have performed this year. the dsmc has grown almost 18% year on year. umc has been more or less flat in terms of performance. so i think the difference is not only between, as you are suggesting, between chinese or
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taiwanese, i think it is more based with certain companies who are in the whole chip manufacturing process. >> so what then is the likes of tsmc, smic doing well, and united microelectronics, for example, not? >> some of the areas where i think umc has fallen back is mainly in terms of technology. if you compare it with dsmc. they have been late in the 28 nanometer technology. at least a few months behind dsmc. also they not able to ramp up in terms of capacity, as well. so these are some of the key issues that umc will need to address. even if you look at the capital investment plan for 2013. dsmc is looking at investment of anywhere between $9 billion to $10 billion. whereas -- as you saw in the investor presentation, umc is just looking at about $1.5 billion for next year. all of these are, you know, the
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key issues which umc faces today. >> and it's ross here, just looking at the increasing penetration of smartphones. they require much higher chip capability from both apple and samsung, of course. so who is going to win the battle? because i presumed you've got to reinvest quite a lot to get more supply into the market. >> well, yes, absolutely. so if you look at the trend for the mobile market, currently if you look at 2012, the penetration is almost up to 40% in terms of overall mobile phone sales. and it is expected that 2013 will actually be the inflection point where the number of smartphones will overtake the number of, you know, the standard mobile phones which are produced. which again means that you will need chips which are, you know, much better in terms of performance. and that will definitely swing the favor toward chip companies
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who have that capability to manufacturer those kind -- manufacture those kind of trips as well as who have invested in capacity. and looking at the currency now i think in dsmc, we're looking to gain from that particular aspect, as well. >> okay. and that will be their gain, as well. what is -- so do you think the likes -- apple have been talking about some supply constraints are. those supply constraints going to go away? >> not immediately. but definitely as we move into 2013, some of the supply constraints will go away because of the investments that are being made. especially on the expansion of the 28-nanometer technology. that will all come on stream. and a lot of the pressure which is currently being faced by the smartphone manufacturers will ease as we look into 2013. >> thank you very much, vice president of consulting for asia pacific at frost and sullivan.
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jumping on the yen train, seems to be working wonders for earnings reports out of asia. the latest company seeing accelerated provisits mazda. we have -- profits is mazda. we have the story from tokyo. hi. hi, ross. the yen is hitting multi-year lows and more earnings reports are showing appreciation. mazda motor has more than doubled its full-year profit forecasts $277 million. that would mark the first yearly net profit in five years for japan's biggest carmaker by volume. the hiroshima-based firm said the fall in home currency and cost reduction offset sluggish vehicle sales. the end rate drives mazda's success as it exports 80% of the cars it builds in japan. the highest ratio among japanese carmakers. prior to announcing its results, mazda shares got the market pop along with toyota which also raised its profit outlook yesterday on the plunged yen.
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for my con another benchmark -- nikkon another benchmark. the camera company cut its full-year operating profit to $514 million from its november forecast of around $770 million. profits at the firm are being squeezed by falling prices of single lens reflex cameras. the sales of nikon's multimillion-dollar lithography machines were also slow last year. back to you, ross. >> thank you very much. that's the latest from the nikkei in tokyo. staying with asia and earnings, in particular southeast asia's biggest missed profit. dbs earned $614 million, it narrowed bad debts but says weak margin still weighed on earnings. the bank was one of the worst performers in the index in singapore. we can look and see, still down relatively modest 1.6%. cnbc sat down with the lender's
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ceo, asking about margin compression in china and how he's planning to drive growth in the world's second largest economy. >> the pressure was broad based in a particular way. one, china nims have been coming off sharply. that was a function two of things which started like six months ago. one was the state of liberalization. when they liberalized interest rates and allow people to price loans down to 30% lower than the stipulated rate and allowed deposits to price up, that put margin pressure on most of the mid-sized banks. in our context, though, the bigger driver was the fact that we had large state finance that we built over the last couple of years. in the past two or three quarters, that taped finance portfolio has been repricing down. that's been the biggest source of margin pressure. most of that happened in the third quarter. some of it spilled over into the fourth quarter.
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and off our five basis points of overall margin reduction, it contributed about a quarter perhaps of the total margin compression. >> global regulators have been giving more breathing room to the financial institutions to meet guidelines. the last time we spoke a year ago, you said the regulations as they stood at that time were fairly onerous and not business friendly. do you think that we've reached an appropriate equilibrium, and has that been reached? that is considered as business friendly? >> you know, the -- the big thing that happened recently obviously was the liquidity related guideline modifications. i think the liquidity modifications were timely and appropriate. and i think as they're recrafted now, i think they're workable with. but i have a view which says that by and large, people are sanguine about the capital guidelines as they relate to issue. people worry about capital in europe and the u.s., that's true. today's capital is not a
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problem. for us at dbs, even after implementing bassal three, we are at 13.5% core tier-one capital adequacy. not a problem. our own suggestions are over the next five and ten years, asian bank will be capital deficient in bassal adg. even if the $10 million of infrastructure is remotely correct, the credit available in asia could be a problem. i suspect there will be a credit crunch in asia as you work out to the rest of the decade. >> dbs. i want to refer bac to the previous question we can had. interesting satesh saying this year smartphone production will overtake that was regular phones. >> right. >> now your producer thinks that clearly that's obvious that was going to happen. >> what's interesting, this is an important point. one that's subject to more debate than you might think because there's a lot of people who say if you look at trends for the remaining emerging and frontier market that don't have
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a ton of mobile phone penetration, what they have and what they use are the more traditional-style phones that have text and hauling capacity, not necessarily smartphones. that there's not necessarily the income demand for it, the market for it, and that even if smartphones -- >> necessarily the -- >> take hold in the west, they might not take hold in the rest. >> yeah. >> nevertheless, it looks like this could be a turning point here. the real question -- you're seeing that. if you look at the divergence between, for example, this is what prompted the conversation, a umc and tsmc, tsmc way outperforming on a 12-month basis. recently if you look at the fourth quarter earnings, tsmc strong, talking about strength in the smartphone market. umc comes out this morning, disappoint. you know, you see why. the traditional mobile phone segment is not growing the same way. it's actually telling that perhaps there is going to be demand for these phones in order to sustain the share -- >> i'm sorry. i was looking because i'm sure,
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i'm sure arm holding shares -- >> great story. as mark haughton likes to say, you know, you buy a.r.m. because if you leak at the gold boom, you want to buy the picks, a.r.m. is, semiconductor companies are the picks and shovels for which way the industry is. >> since we still have autonomy, i think a.r.m.'s probably britain's biggest tech company. pure tech play, i think. >> a great story. up 6% in the last seven trading days. >> yeah. okay. all right. that discussion continues. let's reon monday you what's on the agenda in asia, as well. machinery orders and key numbers from key corporates like nissan, suzuki and sony. numbers for january are due, and other earnings include telestra, singapore airlines, and sans china. i think that's the casino. >> peopling of games -- >> yes? oh. >> one classic monopoly token set to go off the board.
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yes, monopoly manufacturer hasbro planning to replace one of the eight game pieces that have long been part of the game and has asked the public to vote on its facebook page on which should go and which should replace it. now apparently the -- what hasboro has said is which two so far are in the bottom. it's the boot -- >> no -- >> the iron. >> no, no. the wheelbarrow and the thimble. i have never -- never, ever, i've never had a monopoly set with a wheelbarrow and a thimble in it, i'm sorry. >> but buy it from a secondhand store? >> the pieces -- is anybody -- >> is that really a case? >> has anybody ever had a wheelbarrow in their monopoly set? or a thimble? >> i haven't played in too long. i think that's a u.s./u.k. thing. >> i've never seen that in the u.k. never seen a wheelbarrow or thimble. as far as i'm concerned, those can go. >> that means they have to ask -- they have to add two more pieces then to take their place. do you have -- can we show the
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contenders? do we have pictures of what might be up in there? we don't, but apparently -- is it the scotty dog? no -- >> can't go. >> there is a scotty dog there. >> it'she scotty dog. there are several piece that's might take the place. you can vote on facebook. apparently the results will be announced today on -- on the "today" show. >> the "today" show. >> a couple of people watch that program. >> some people. >> in the u.s. i don't know why when you've got "worldwide exchange," but anyway, yes. we'll see what happens. >> you need something modern, the household -- modern life. you need a smartphone. is that -- smartphone. >> yes. >> we need a smartphone. >> exactly. i hope they keep -- i'd like them to keep it the same. >> little silver smartphone. they gave it -- wheelbarrow, there's never a wheelbarrow. get rid of that. i've never seen one. >> what do you think should stay or go? e-mail us, worldwide@cnbc.com. very important issue or tweet us. you know how to reach us directly, too.
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a lot of things to keep you informed of. tensions between tokyo and beijing continue to escalate after japan accused the chinese military of locking fire-control radar on a naval ship. today the prime minister called the incident a one-sided provocative act that could lead to unintended consequences. the incident took place near disputed islands on january 30 but took time to verify. the pentagon says both sides ought to avoid any acts that might spark conflict. meanwhile, china is promising to make sweeping tax reforms to narrow the rich/poor suicide. plans approved by china -- divide. plans approved by china says the rich might pay more. in companies, taxes could rise 20% by 2015. there's talk of giving savers a better return.
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it's for tilting toward more consumption than investment spending. an expected pickup in china is giving a reason to be more optimistic after a challenging 2012. the company said the net loss widened to nearly $4 billion in the fourth quarter last year. but the biggest steelmaker by volume expects profits to pick up amidst improving conditions. in china alone the company sees the steel market growing 3%. and the stock up 2% as a result. and syngenta trades are lower today. the company reported full-year net profit of $1.8 billion. that was ahead of a reuters forecast. it expects another record sales year citing strong commodity prices. so what a disappointment. carolyn roth is in zurich. is this a question of you meeting expectations, or is something else going on with the stock price? >> yeah, certainly a number of factors. first of all, let me point out that this stock has had a really good run in 2012. up 33%. up roughly 8% since the
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beginning of the year. so maybe there's a little bit of profit-taking. it is very richly valued at this point. trading close to an all-time high. so that's why we're seeing a little pressure on shares this morning. secondly, numbers were okay. sales really just meeting expectations, up by 7% to $14.2 billion. margins maybe were a little bit of -- were a little light. but the question is, is the sweet spot situation for the company going to continue in 2013? is it going to be another record year? this is what the ceo told me this morning. >> we've strung together now several record years in a row n in, and upon 2012 was no exception. hopefully 2013 will be another in a string of successful years for the firm. what's powering that, of course, as i said, the population growth. we've spoke ben this before. the fundamentals are still all largely intact. >> reporter: so there you go. that was mike mathis, ceo of syngenta, speaking to me earlier
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today. thooes fundamentals -- he says the fundamentals are still in place, that is potentially higher crop prices and population growth in 2013. back to you. >> all right. carolin, thanks. rbc set to become the third bank to settle libor charges with globe investigators today. a number of reports suggest british and american regulators will announce a fine of between 400 million and 500 million pounds. an asian unit of rbc is expected to plead guilty to criminal charges in the u.s. the justice department is not expected to charge any individuals. at the same time, the business secretary vince cable played down expectations of an immediate plan to reprivatize rbc. speaking in london, he's delivered a damning verdict on the handling of the bank. and hsbc takes a turn in the hot seat appearing before the u.k. parliamentary commission on banking standards. hsbc's ceo, stuart gulliver and chairman douglas flint, giving comments as we speak. a couple of comments on the wire
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from them. flint i believe was saying that he supports the electrified fence that we heard george osborne unveil earlier that would effectively separate retail and investment banking for those banks that don't comply with the law. as we get other comments through from this as we have in previous days, we will bring you comments from that hearing. now earlier we asked you, yes, what monopoly token would you kick out. monopoly in the middle of updating its playing pieces. joann from michigan tweeted that she'd retire the beat-up old shoe and replace it with a louse vuitt vuitton. and another tweet, he'd give the shoe the boot. john, though, would rather get rid of the iron. he reiterates it's a great game. >> the iron? no, no, no. no, no, no, no. it stays. >> i think it's a case that there are fewer pieces here than in the u.s. >> yes. i never played the game with more than six pieces. >> maybe that was just your special game.
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you know? i just don't think that the row president should go into -- robot should go into monopoly. after the break, news of -- after the break, news of an imminent change in the bank of japan pushed the yen to a three-year low. we'll ask our guest how long can it go. 33-month lows today, we've done down dollar/yen been to -- over 94. where we stand at the moment. 93.73. euro/yen also up 126.90. down to 33-month lows there. sterling/dollar, 156.60. down a 5.5 month-low. sterling has replaced, certainly more risk off than the dollar. when it's more risk on, cable weakens. that's good news for you, kelly. so we'll get into all of this. "worldwide exchange," the second hour continues.
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welcome to "worldwide exchange." i'm kelly evans. >> i'm ross westgate. here are your headlines from around the world -- >> disney could be a happy place today as the media giant reports better than expected earnings and sees brighter days ahead. no imminent privatization for rbc. the business sector events cable plays down talk of a government plan to sell shares in the state-owned bank.
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this as rbc confirms it's likely to face significant libor penalties. forecasts, a rise in steel demand thanks on shipments to china after a dismal year for the industry. and a mighty surge for the nikkei in japan. it swoons on news that the bank of japan governor will make an early exit, opening door for more easing sooner. woe continue to make gains for u.s. equities. we are higher again, not by much by u.s. markets. today the dow is caught up some 12 points higher. the nasdaq is about, what, two points over fair value. the s&p 500 at the moment about 1.75 point over fair value. european stocks have tried to add to the gains that we saw yesterday. the ibex only up 15 points. xetera dax is flat, the footse
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100 up .5%. the cac is negative. a number of individual stocks worth looking at, as well. wind systems came out with better than expected numbers, currently up 6%. also talking about steel demand picking up, as well. so that's helping. this is after the net loss $1 billion to $ billion in the fourth quarter compared to a $1 billion loss. syngenta, talking about this, stock down 1.5% despite another year of record sales in 2013 helped by strong commodity prices. the stock had a big run-up. that explains why we're seeing a little of what appears to be profit-taking. and volvo stock is up. this despite up -- up 4% despite the fact that earnings fell more than expected. they talked about weak not in europe. again, the ceo said they are seeing a better trend for q1 orders. as far as bond markets are concerned, we keep our eyes on yields in italy and spain. yields in italy, 4.46%. remember, monday we were up to about 4.7%.
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still flat from where we finished on monday. spanish yields are loafer than where we finished -- lower than where we finished monday. 5.4, 5.36, not much. and the german bund auction coming up in this hour. we expect that to go fairly smoothly. on the currency markets, euro/dollar, 1.3459 yesterday. we were above that a moment ago, down on the session. dollar/yen did hit a fresh 33-month high, above 94. just below it at the moment, 93.72. aussie/dollar weaker at 103. weak sales in australia suggests the rba may consider cutting rates even more. and australia and sterling dollar, currently down near 5.5 month lows at 156.56. down 1.5630. that's where we stand in europe. d of the u.s. open. we'll recap the asian session with more out of singapore. >> thank you. it's really the tale of the runaway nikkei in asia. the japanese market ending
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higher by a whopping 3.8% to a more than four-year high. an early exit, bank of japan's governor stoked further easing hopes, sending the yen to near the 94 handle against the greenback. the recotronnics maker surged -- electronics maker surged after announcing a 29% drop in net profit for the last three quarters. the largest carmaker, toyota, rallied 6% after raising annual profit guidance on a weaker yen and stronger u.s. sales. elsewhere in china, the shanghai composite managed to end in the green for the eighth straight session. developers pulled back on fears of more property taxes, but brokerage has rebounded strongly after losing over the past two days. the hang seng added a half a percent after suffering its biggest one-day drop in three months yesterday. many blue chip names rebounded. gaming stocks tumbled after a u.k. newspaper reported boing beijing -- reported beijing is bringing mainland gamblers.
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the kospi lowered for the fifth straight session. the yen weakens again the korean uan. gains in miners and banks. india's sensex just ended lower by .2%. back to you, ross. >> all right. thank you very much indeed for that. a lot of feedback coming on the monopoly plans to change the playing pieces. >> which i am adamantly opposed to. >> yes, but on the basis that we've only had six in the u.k., i'm happy to ditch the wheelbarrow and thimble. we never had them. i won't miss them if they go. >> you had the 2005 deluxe edition that included the top hat, iron, ship, dog, boot, and car. that explains why you hadn't seen a couple of the pieces anyway that they might do away with. >> even the editions that they had when i was 5, the 1960 whatever -- 1860 edition, still didn't have a thimble or wheelbarrow. never, never. >> they should bring out a new
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version that has the classic pieces. because as soon as they do away with them -- >> that was the deluxe edition, 2005, with the classic pieces. >> keep your thoughts coming. it looks like the boot is unpopular our own viewers. could be the one to go. we've been taking a quick look at what's been happening this morning with the yen in particular. >> yen weakening. the nikkei flying as a result. dollar/yen above 93.69. we did get above 94. how much weaker can it go? near 33-month lows against the green good back and euro. the fx strategies at ubs, jeffrey joins us. good morning to you. how much more is there in this momentum? >> well, we see 95 as pretty much imminent within the month. then anything higher i would be less concerned about levels and more concerned about what everyone else has to say. yesterday's comment by francois hollande pointed, calling for the exchange rate target for the
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eurozone. not surprising if you consider that the core european economy, it's quite in competition with a lot of what the japanese economy does. and we've got the g20 next week. i think yen will be a topic of discussion though they won't focus too much on it in the final communique. then rbc will be heading -- abe will be heading to washington soon. from japan's point of view, trying to get away with as much as possible and see what happens next. i wouldn't rule out 100 over the next three months or so. after that, i think it gets really tricky on the political front. >> jeffrey, do you mind pivoting to talk about the australian dollar for just a second? we are seeing weakening this morning. disappointing retail sales. people talking about a rate cut. is it going below $1? >> well, i think right now a lot depends on how the international reserve management community and also how asset managers view. this we've seen a passive bid for the australian dollar, probably in the 102, 104 level, all throughout the last three to six months. people less concerned it the australian economy. they want a q.e. hedge. they want commodity exposure.
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they keep adding to their portfolios. now they can't get too much yield out of the aussie where you can get yields back into the euro, going to higher yielding assets else. this is hurting the aussie. we think parity's too aggressive in the short term. with the three-month horizon, we could get there. probably it would have to happen for that to follow through. otherwise, longer term aussie should still do well. a lot depends on international policy. >> yeah. go back -- you mentioned the francois hollande comments. bemoaning the weaker euro. he's spouting off, isn't he? who's going to decide how to control the euro exchange rate? >> yeah, it's interesting. he said he can't allow the euro to fluctuate according to markets' moves. the response of that is there's a reason it's called a market. but the fear here is this -- like tomorrow, we have the ecb meeting. draghi is going to be very careful with what he says.
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probably the ecb is not concerned about where the euro is. the tolerance thresholds are much higher. we know that the ecb is responsible for policy at the end of the day. but this does not preclude in any way whatsoever the euro group coming out with something unilateral, something on the political front directing their -- their criticism at japan, at the u.s., and at monetary policy in general. and doing something to undermine the euro. so the big risk for the euro now is if the governments stop talking to the ecb on this matter, there's not a policy in any way, that's what could undermine. if anything volatility will pick up. we're seeing it in options markets already. >> we have a meeting with the incoming governor at the bank of england. talk it where sterling i should say may be headed. so we've been -- you know, 1.56 lately. do you expect more wasteful spendingening here? how vulnerable -- more weakening here? how vulnerable is the currency? >> we expect a move lower. probably it will hit 1.50 soon. euro/sterling higher is a trade i like more.
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could get well above current levels, maybe 90 is achievable in euro/sterling. the risk for the short term could be a slight correction in europe/sterling. a lot of people have put on short sterling trades already. the expectation is for mark carney to come out in favor of gdp targeting, something as aggressive as what the u.s. or japan is doing, if not more aggressive. if he disappoint that in any way whatsoever, being less aggressive or more cautious on policy innovation, sterling could correct higher. a lot of money has been put into the trade, too quickly. so in the short term, i wouldn't add two short standing positions beyond where we are right now. >> we'll leave it there. thank you very much. there is a lot of pressure. >> no one would have seen that. when jeffrey said 150 on cable, kelly was a little -- >> a fist bump. >> a fist pump. >> it hurt to be here. everything is an additional 50%, 60%. an expensive city.
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so we'll see. it sounds like if mark carney actually doesn't come out with some of the more dovish statements on thursday people are expecting, the other thing could happen. we could be backing up toward 1.60 again. we'll see. mark, i hope you're listening. i'm kidding. >> between 1.50, 1.65 is -- what the exchange rate should be for dollar/sterling. that band is the comfortable trade weighted. it's about right. >> okay. >> and now, hsbc taking a turn in the hot seat this morning, appearing before the parliamentary commission on banking standards. hsbc ceo stewart gulliver and chairman douglas flint giving answer as we speak. just to let you know that that's happening. and there's plenty of corporate news, as well, today. >> that's right. disney's first-quarter profits fell 6% in part because of rising costs to buy sports content for espn. the company is exploring an exit from espn in the u.k. excluding that, results beat forecasts as revenues rose 5%. disney does see better quarters ahead thanks to strong film
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slate and improving theme park attendance which is an interesting tell on consumers. also, fans of yoda, chewbacca, and r2d2 may have reason to celebrate. disney is developing spinoffs featuring several "star wars" characters. beyond the three sequels already in the works. how much can you milk this thing? disney bought lucasfilm in october for $4 billion. >> when you say $4 billion, you have to milk it for everything you've got. >> shares up 1.7%. only about 4 % move in the last three months for disney. >> yeah. they've got a serious return on investment there. >> zynga reporting a surprise fourth quarter profit as the social media gamemaker struggles with deep cost cuts. the number of active users fell for the first time since 2011. zynga also expects first-quarter revenue to fall about 20%, citing a light slate of games planned for the period. investors, though, liked the results which did show a profit as opposed to a loss. shares were up about 7% after hours. you see in frankfurt trade, giving that up a little.
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they're up in the range of 5.9%, although coming off of 18% move over the past quarter. >> yeah. >> interesting. now, it is a big week for media earnings. we'll discuss the sector with reuters' l.a. bureau chief in the next half-hour. reminder of what's on the agenda in the united states. no economic data to speak of. earnings will likely carry the day. before the bell, we get results from time-warner. cvs caremark, intercontinental, exchange, ralph lauren, madison square gardens. after the close, we'll hear from news corp., visa, all-state, prudential financial, and yelp. so that's the things to keep your eyes on. we'll talk about media stocks, as well, coming up in the next half-hour or so. >> that's right. now a couple of stories to keep you busy on the web site while we take a break. after weeks of improved sentiment, yields on italian and spanish bonds have spiked this week amid political uncertainty. investors now looking for a halfway point between the ultra low yields and safe havens such
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as bunds and the european periphery. does that make french debt attractive? see what some analysts think at cnbc.com. also, while down from the 2006 peak home prices are suddenly heating up in the u.s. properties in cities like phoenix are up 26% from just a year ago according to one new report. so some are wondering if they're too fast. that's right. that story is on the web site, as well. also, the recent euro rally is fueling concerns of further pain in the struggling eurozone, prompting french president hollande to call for reforms to the international monetary system. can a strong euro derail europe's recovery by dampening export demand? you can see what people have to say at cnbc.com. still to come on the program, you've pinned pictures and videos on pinterest. now the online scrapbook is looking for someone to pin them funding. find out how much they want. to grow, we have to boost our social media visibility.
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more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide. fedex.
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you are watching "worldwide exchange." these are your headlines. disney proves all's well at the magic kingdom as the media giant delivers better than expected results. rbc is expecting significant penalties to settle libor manipulation charges. the yen plunges to multiyear
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lows prompting a surge in japanese equities on changes in leadership at the bank of japan. meanwhile, some of the other stories we're following -- pinterest trying to raise funding that would value the popular online scrapbook at up to $2.5 billion. the "wall street journal" says nothing has been finalized. pinterest has seen rapid growth. it has 28 million users. it last raised money in may which valued the site at 1.5 billion. google has been proven innocent in an australian high court. the judgment overturns a ruling from a federal court accusing the search giants of displaying misleading and deceptive paid advertisement. in 2006 and 2007 they allegedly displayed results linked to a competitor. and nasdaq in talks with the sec over facebook's botched ipo. the "new england journal of medicine" says a deal would -- the "journal" says a deal would include a $5 million fine. brokerls s they lost upwards of $500 million because
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of the technical glitches during fibro facebook's ipo last may. a compensation plan offered to pay $62 million, but that's received mixed reviews. the nasdaq, however, stock quote -- in frankfurt, up about a percent today. hsbc has been taking a turn in the hot seat, appearing before the british parliamentary commission on banking stance. the ceo and chairman have been giving evidence as we speak. now, the ceo, mr. gull ever, said this morning that -- gull ever, said this morning that hsbc is not too big to control. he's simplifying it by organization. and discloses interestingly enough, the chairman now supports electrifying the u.k. retail banking wing fence. the chancellor came out with this a couple of days ago and said that they wanted to electrify the ring fest between commercial and investment banking, going further than anyone in the world.
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and mr. gulliver saying that the bank was too slow to approve anti-money laundering controls after it bought the bank in mexico. he says the structure of the bank before 2011 was not fit for purpose in a modern world, maez it attractive for criminals to target. >> yeah. interesting there. that comment that the bank strurture was not fit for purpose in a modern world. we're following the hearing and the get more comments from flint and gulliver in the next couple of minutes. we'll bring them to you. coming up, going private. the name of the game for dell. does it mean a reboot for the company? we'll discuss after the break. going into break, a reminder where european stocks are trading. weighted to the upside. slim gains for the indices, 8-2, advancers outpacing decliners on the dow jones stock 600. all stations come over to mission a for a final go.
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one classic monopoly token looks set to go off the board. hasbro plans to replace one of the -- apparently there are eight game pieces in the states. only six in the u.k. has asked the fabvo-- the publi to vote on which should go and what it should be rced with. we've asked viewers what do you think should go to jail and what should take its -- one goes to
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jail but it's staying there. >> judges -- yes. >> the thimble, boot, scotty dog -- i said get rid of the wheelbarrow. you've never had it. one person wrote in and said you can't get rid of it because you need it for greek drag mas. >> once they leave the e.u. another said to combine mitt romney with a dog to kelp indicate i guess how he was traveling -- >> seamus. >> yeah. in the monopoly game. and they're having funny ones, basically saying that they should keep the boot and add a can to the board in order to -- >> kick it. >> kick the can. >> you kick the boot and add a can instead of the thimble. you can kick the can across mayfair. >> there you go. or something. i said they should save it for the european, addition -- >> i don't know that i have that edition of monopoly. >> well -- >> right. plenty more discussion on that. first up, though -- >> adele has agreed to go private in a $24.4 billion
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buyout led by founder and ceo michael dell and private firm silverlake of the the biggest leveraged buyout since the financial crisis. some are voicing concern about the price saying the board should have held out for $14 a share. one stakeholder is investigating whether the board is breaching its fiduciary duty. and we have editor-in-chief of yahoo! finance. aaron, great to have you. thank you very much for joining us. look, we have a -- a guest earlier said, yeah, a hostile bidder may have given $2 or $3 more a share. this was a decent deal all things said and done. do you agree? >> yeah. i think decent is a good word for it. remember, the stock is up about 25% since they first started talking about a deal in january. yes, at $13.65 or thereabouts, there's not a lot of premium here. again, the premium i think was built in with the deal talk as opposed to the deal itself. >> where does dell go? it reinvents itself, tries to become a mini ibm. some of the chatter certainly. you know, the reason why people
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were a little worried about the deal getting done in the first place wasn't necessarily the size of the lbo or financing conditions, it was just what's the business model here. >> right. it's still an unanswered question. dell still gets 70% of revenues from the p.c. business which is the business that's in decline. they've been losing market share. so we can talk with b can they become an ibm and go into the services route. i heard they might try to do an oracle-type model where they would provide the stack of enterprise equipment, a tougher business to get into. but either one of those, they're going to face huge challenges and have to totally -- not totally but dramatically transform the company. >> what about microsoft's role here, $2 billion. seems to actually put a lot on the line for microsoft in making this work. >> it's basically vendor financing for microsoft, right. they kind of need dell to get p.c.s out the door with microsoft word on it. microsoft office. i think they were smart to do this investment.
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basically a subordinated debt for them as opposed to, you know, buying the company which maybe a couple of years ago steve ballmer might have thought about doing. i understand the strategy for microsoft. and i think they're doing it in a relatively low-risk way. >> is this just michael dell saving his reputation, last word? >> i think that's part of it. i think certainly, you know, there's been stories that he cares deeply about what happens in austin. dell's a big employer there. and certainly he wants to, you know, go back to the days where he was seen as one of the top thinkers and business leaders in the world. and as the company has fallen from those heights, so has his reputation. >> okay. editor-in-chief of yahoo! finance. great to have you again. we really appreciate your time. >> thank you. i vote for the iron. >> again -- austin, you know, can't understate the importance that he might see for his personal reputation. nevertheless, stick around. we'll have a break. coming up, disney posts blockbuster earns. the company has big plans for "star wars."
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welcome back to "worldwide exchange." i'm kelly evans. >> i'm ross westgate. disney could be a happy place as they report better than expected earnings and sees brighter days ahead. no imminent privatization for ubs. the talk of selling shares as
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the u.k. bank confirms it's likely to face significant libor penalties. a mighty surge for the nikkei in japan. the yen swooning on news that bank of japan's governor will make an early exit, opening door for more easing sooner. u.s. indices yesterday had little trouble recovering the losses from monday's session. not necessarily the case in europe. if you look here today, we're actually looking in the green for the most part. not by much. the dow trying to add seven point at the open, 13,925 the level there. 14,000 clearly in the cross hairs. nasdaq a little bit less, we should say, less pointed for a rally. take fair value into account, it's looking to maybe shed a couple of points at the open. 1,506 the level for s&p 500. there's been a 1% for the s&p.
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the last time was november of 2011. we know markets had a weak period after that. we'll see if we can manage gains there. and then just how investors react. and now a quick look overnight, the ftse global 300 adding 0.0%. we'll hear more in a second. the european markets up, the ftse 100 adding .4%. the xetera dax to 77.53. the cac down .4%. ibex 35, .6%. interesting to keep an eye europe. it's not nahad that much dornan >> we are -- disney expected a better than expected rise in profits despite costs at espn. we have the results and big news about a galaxy far, far away. disney earnings beat wall street expectations, sending
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shares trading higher after hours. diluted earnings per share secluding one-time items were 79 cents, down a penny from a year ago, but three cents higher than expected. revenue also grew more than expected. up 5% over a year ago. ceo bob iger says advertising is growing and tv fees are also expected to grow this year. the first on cnbc interviewer, i asked him what his expectations are for the economy in 2013. >> i would say our outlook for europe is dim. not all that enthusiastic. our outlook for asia is for our product is probably better than what maybe many other industries are seeing. we feel good about our positioning there. our outlook for the suds quite good. i mentioned advertising trends particularly to espn. our bookings for the parks, we've had five weeks in a row of improved bookings over a year ago in orlando. that's pretty something pattern. i mentioned cruise ships being 8 % booked with 16% more capacity
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than we had a year ago. that's a very good sign. so i would say as we look ahead at the year from a -- a consumer perspective, i'd say more positive than not. >> in a first on cnbc interviewer, disney ceo bob iger made big news about disney's lucasfilm division saying that two additional films are in the works. spinoffs about "star wars" characters. these are in addition to the planned trilogy, episodes seven through nine, which the company announced along with its acquisition of lucasfilm. for my entire interviewer with disney ceo bob iger, go to cnbc.com. back to you. >> julia, thank you. staying with los angeles, ron grover is reuters' l.a. bureau chief and joins us on the phone. ron, good morning. >> thank you, good morning to you. >> an interesting report out here from disney. i guess the question, there's a couple of different pieces to focus on. we start maybe with what's the buzziest, that's the "star wars" spinoffs. how important is the franchise
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going to be for the company going forward? >> well, it's hugely important for the company. this is a company that's built on franchises, whether it's mickey mouse or any of the pixar movies. it's built on taking the franchise and putting it all through the company, getting theme parks involved, consumer products, putting on the disney channel. maybe making a couple of television shows. any one of these are huge for them. i think this is obviously one of the biggest there is. >> what about their box office take -- versus, for example, some of the cable properties, their theme parks, how is this company over time dealing with, for example, the health of the u.s. consumer and generally speaking, just changes in the media landscape? >> well, you know, it's a company that has been ahead of many of the others as far as getting new technology. it has hulu, a television channel that's on line basically. it is always doing quite well. its great strength is divest. it's got theme parks, it's got cable channels as you mentioned,
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it's got a studio. they don't all do well at the same time. this time, for instance, the studio didn't do particularly well. the cable company didn't do as well, espn had problems. they beat expectations, they were lower expectations than they perhaps wanted in previous quarters. >> espn used to be one of the reasons that analysts always favored disney. now is it a reason for caution, ron, going forward? >> you know, the company says it is not. they say it's a one-quarter thing. that they've had programming costs for college football and other things, that they've had to put into this quarter. as a result, the quarter for espn this quarter was not very good. they say it's temporary. they say they've got a lot of good deals coming up, people -- cable channels will pay more. they're doing better on mobile. it's part of the wait and see. we've loved espn for so long. everybody expects it will come back. but a bad quarter is a bad quarter. and it's a wait and see on those guys. >> ron, where does this leave them in relation to time-warner and news corp.?
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time-warner, the studio last quarter of a disappointment. >> yeah. you're quite right. it was a disappointment. we've been built on the "harry potter" and huge films. harry potter haurp as you kn"ha to find a new one. who knows if tell take long. the superman suits starting up, and the batman suits. and you know, it's not performing where they want it to. they recently put a new chairman in place at the studio. it is one of the, you know, the real engines of hollywood. one has to expect it will start performing quite a bit better. >> okay. and yeah -- what about -- i mentioned time-warner. at news corp., again, the movie had that surprise hit "life of pi." i'm thinking about the entire group now. >> yeah. you know, they live and die on their giant food stamps well, it's after tar or -- avatar or "x-men." they live and die on big film because they're good at keeping costs down. they is much more sense of
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profits when they can make a good film really hit. they just didn't have that good, big film. "life of pi" was a good, big surprise. they could use a few more surprises in the upcoming quarters. >> ron, thanks for joining us. i know it's very early, very late depending how you view things in l.a. l.a. bureau chief for reuters. earlier we asked given the news from disney what "star wars" character you wanted to see have its own movie. a couple said princess leia and luke skywalker. joe says yoda should get a spinoff as his adventures as a young, training jedi. >> don't want to write the skrit. i think the millennium falcon. luke skywalker and the millennium falcon off on the galaxy. they're illegally running people and goods. >> do you think people will ever get sick of the franchise? >> disney hoping not. if you paid $4 million, $4 billion, sorry, for it, they
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need to milk it for everything it's got. >> i just wonder if that doesn't backfire at some point. maybe not, though. everyone's discussing it this morning and sticking with the media theme. coming up later on "squawk on the street," we'll have an exclusive interviewer with time-warner's ceo jeff bewkes, his first tv interviewer in nearly two years. >> for someone who runs a media company, he's media shy. still to come, u.s. lumber future on a roll. optimism around housing construction. we'll leak t moves in a few minutes. to grow, we have to boost our social media visibility. more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day.
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here's what's popping on line after several weeks of improved sentiment. yields on italian and spanish bond spiked amid renewed political uncertainty. investors looking for a halfway point between ultra-low yields and safe havens, and the european periphery. is it time -- are they, rather, taking a look at french debt? yeah. you can see what analyst have to say at cnbc.com. also, while still down from the 2006 peak, home prices are suddenly up in the u.s. properties in cities like phoenix are gaining 26% if a year earlier, according to reports. are they rising, in fact, too fast? there's interesting discussion about that on the web site, as well. ross? >> yeah. plenty more there. more corporate earnings out
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this morning, as well, here. a business recap of stocks that we've had. let's kick over with vestis wind systems. the danish wind turbine maker. stock up 5%. announcing better than expected rise in fourth quarter profit and revenue, as well. also, the steelmaker, stocks up nearly 2% despite the company seeing a loss widening to $4 billion in the fourth quarter. had a $1 billion loss in the same period a year ago. but the ceo said that result hit by ongoing uncertainty in europe hit by 9%. why shares are up, though, because they're talking about profits picking up this year on the back of improving market conditions elsewhere. syngenta stock is down 1.3%. we'll in to that in a second. first, volvo stock up 5% today. and they've been talking about weakness again in europe. again, the ceo saying they see a more positive trend for q1 orders. let's click on syngenta.
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they reported a net profit of $1.8 billion, ahead of a reuters forecast. we'll get more from zurich. good news out of the company. is it because we've had a good run in the stock, we're seeing it lower? >> absolutely. after such a fantastic rally 2012 when the stock was up 33%, up by more than 7% so far this year. it really took a massive bead for the company's shares to move higher. that wasn't the case this morning. don't get me wrong, numbers weren't bad. they met expectations, up 7%. $14.2 billion for the full year. very much driven by strong performance in latin america and north america in the fourth quarter. now epa rose by 15% to $22.30 a share. partly because of a lower tax rate. i spoke to the ceo of the business this morning. and i asked him whether 2013 was
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going to be another record year. and this is what he said. >> we've strung together now several record years in a row, and 2012 was no exception. we're looking forward, of course, to growing our sales. hopefully 2013 will be another in a string of successful years for the firm. what's powering that, of course, as i said, the population growth. we've spoken about this before. it'sum -- the fundamentals are still largely intact. >> that was syngenta's ceo speaking to me earlier. obviously a lot depends on the weather. but it also depends on what crop prices are going to do because higher crop prices, of course, incentivize farmers to spent more on the company -- to spend more on the company's crop production and seeds product. there's uncertainty. again, what can you do about the weather? back to you. >> carolin, thank. >> what can you do about the weather? >> yeah. not enough. thank you very much for that. in another sign of growing demand across the commodities space, trading in lumber futures
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on the cme was halted after the 2% exchange on the maximum move on the exchange. gains come amid growing bullish sentiment for u.s. housing and construction. up 9% over the last seven days. it's not just the u.s., it's prospects of additional construction in china that's helping. there was this report yesterday from -- it was core logic, i think, talking about one of the biggest year-on-year increases it's seen in home prices since the collapse. now the homebuilders did okay yesterday. they were up about 1%, underperforming, others holding in there. on a day when the market did well, when lumber was -- was limit up, you would expect them to have been stronger had it not been, a, for their prior rally, or, b, that it had to do with china. >> one more brick used in this country. >> i noticed that. >> we're brick. >> a nice look. >> very brick oriented.
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>> don't you think it's because there hasn't been a lot of new construction? because a lot of new construction is still -- >> no, still brick. >> is it brick? even though it's -- >> we build houses out of brick. >> is that a requirement? it must be. >> not necessarily a requirement. just what we do. or done for a long time. >> what about particle board and materials that are cheaper, people would have to use those, i would imagine, for new builds unless they can afford brick. >> no, we build out of brick. that's it. that's what we did. >> i want someone on from the brick builders association. >> everybody builds out of brick. it's cheaper, isn't it? >> it also looks nice when you drive through the countryside. yeah. if you're just joining us today, these are your headlines -- disney proving all is well in the magic kingdom. media giant delivering better unanimous expected fourth quarter -- better than expected fourth quarter results. hsbc saying the money laundering scandal crushed its reputation. and a surge for japanese stock amid news of an imminent change in leadership at the bank of japan. all stations come over to mission a for a final go.
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head of the u.s. and european markets turning south. we were up first thing this morning. you see the cac down 2/3, the dax down, the ftse up a quarter. so far after being a laggard last year might outperforming the rest of the european markets. on the agenda in the u.s. as we pivot toward the session, no economic data to speak of. earning will likely carry the day. we get results from the open from time-warner, vcs caremark, international exchange, ralph lauren, and madison square garden. after the close, earning from news corp. we'll hear from visa, all-state, prudential financial, and yep. u.s. futures -- yelp. u.s. futures showing modest positives, barely if you take into account the dow adding literally one point. the nasdaq andipeis roughly unchange -- and s&p roughly
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unchanged. wiped out the losses from monday. we're looking at key levels. less than 80 points away from 14,000 on the dow. 1,-506 for the s&p. the nikkei having a great run. up 3.77%. the yen is down at 33-month lows against the dollar and the euro. we sat down earlier than he was planning to meaning the monetary policy will start earlier, as well. interesting that there was chatter in the market yesterday. it took until today to be an excuse for the market to move higher. that yen and the nikkei link continues unabated essentially. that's where we stand ahead of the u.s. open. let's remind you what some of the guests already today have told us about what you should do with your money. >> there's very lid out there in the spanish market which doesn't have an alignment roughly with where value is now. it's not a market that's trading at a big discount to its value.
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but risks move to almost zero. we know low volatility's out there for a lot of markets now. as those risk apps widen, places like spain and italy will be in the forefront of that profit-taking and price gapping again. >> it is expected that 2013 will be the inflection point where the number of smartphones will overtake the number of the standard mobile phones which are produced. which again means that you will need chips which are, you know, much better in terms of performance. and that will definitely swing the favor toward chip companies who have the capability to manufacturer. >> it's a good word for it. remember, the stock up about 25% since they first started talking about a deal back in january. so yes, at 1,36 or thereabouts, there's not a lot of premium here. but again, the premium i think
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was built in with the deal talk as opposed to the deal itself. that was aaron task on the program earlier. he said he would get rid of the iron on monopoly. we disagree. more on that in a second. >> no. keep the iron. first, joining us now is kent cakayman, guest blocker fo cnbc.com. his latest piece, "four reasons to be optimistic in 2013," on the site now. ken, good morning. >> good morning. >> look, we'll save the monopoly talk unless you want to make a market metaphor this. but -- so you're still bullish at these levels. we are looking potentially for, you know, coming off three days of 1% gains on the s&p 500. not taking profit here? >> listen, i federal funding a short-term point of view -- i think from a short-term point of view the market had a heck of a rally. people are probably looking for an excuse for it to back off. but the piece i wrote for cnbc.com really talks about that we're at the beginning of what i think is going to be a long-term trend for the market. there's a lot of very positive things going on right now.
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you know, the whole natural gas and kind of the united states energy story. housing is starting to come back. all this cash that's sitting on the sideline, you're seeing it starting to really come into the market as people are afraid to miss the next bull leg because there's so much been stuffed in the mattress. those are things to think about from a longer term point of view. when people think about their retirement money, not their trading money, if you will, now's the time to really start lagging yourself into the market. you're not going to pick the best days or the worst days if you can just continuously come out and play a little bit. >> what about, ken, the sequester -- we have coming up potentially the sequester. we know there's been a builds delay. that again, but continuing resolution here over government shutdown. some of the fiscal cliff issues basically still haven't been resolved here in the u.s. we know growth in the fourth quarter, you know, frankly negative in the first quarter, probably not all that great. so why isn't this doing more to spook investors? >>. >> well, i think the sequester
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is going to be significant because of the rancor in the headlines. but i think ultimately it will be a speed bump. the types of things that i highlighted in the article are more longer term trends. and i ended the article actually say figure our friends in washington don't screw it up. so i think that's always a risk. unfortunately this more political risk now than economic risk in my opinion. i think it's kind of a speed bump that we're going to get past even though the headline will give us a lot of angst. >> yeah. and ken, europe, a lot of people are saying things disappear. some say it will come back. what's your own view? >> yeah. i think that's going to be a game of whack-a-mole. headline will come up and then knock them down. again, i think that as long as europe isn't the fear that europe's going to slide off into the mediterranean somehow and sink like atlantis, i think we'll be fine. you know, the -- it's not nearly the problem it was a year ago as the headline risk. it doesn't mean that it's not a lot of issues underlying.
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i think the markets will react favorably this year from a lack of headlines out of europe or dramatic headlines. let me put it that way. >> good to see you today. look, on the monopoly thing, by the way, which piece would you want to get rid of? >> i actually always went for the thimble because it was the easiest to move around. >> you keep the thimble? anything you want to get rid? >> the wheelbarrow wasn't my favorite. it tilted over on me. >> i think it's men afraid of doing the hard labor or something. >> yeah, that's me. >> you don't want the wheelbarr wheelbarrow. others don't like the iron. that's what we were saying aaron would get rid of. i'm seeing a theme. >> it's what we would replace it with. >> i found the wheelbarrow to be unstable. the three -- you know, points -- >> i see. okay. >> when you're in an asset management business, you don't need instability. ken, thanks for that. one classic piece is going to leave the monopoly board. hasbro will replace it. >> nail find it on the "today"
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show today which one. >> they'll put it on the facebook page. earlier, we asked what you thought would go. the him better, boot, scotty dog. howard said "the boot kicked butt and should be retained. i agree with ross, the wheelbarrow should be canned." squawks up next.
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